FIELD ACTIVITIES / Grande Portage Resources updates Delvina Project
TORONTO, April 16 /CNW/ - Grande Portage Resources Ltd. (GPG - VSE)
previously announced on March 4th, 1998, that it had entered into a Heads of
Agreement with SH.A. Albpetrol, the state owned oil and gas company of the
Government of Albania, for the development of the Delvina gas project. This
corporate update is intended to provide shareholders and investors with
additional details about the Delvina project.
The Delvina Field consisting of gas and gas condensate was discovered by
SH.A. Albpetrol in 1987 with limited production commencing in October of that
year. Between 1987 and 1994, production from two wells totalled 1,744 MMSCF
and 97,800 barrels of condensate. In 1996, Grande Portage retained an
independent U.S. based consulting group, Poco Oil Co., to review the project
and to make recommendations to the Company. Amongst other findings, the
consulting group estimated the reserves at Delvina as follows:
Proven Natural gas MMSCF 158,174
Condensate Barrels 8.8 million
Probable Natural gas MMSCF 77,737
Condensate Barrels 4.3 million
Possible Natural gas MMSCF 164,135
Condensate Barrels 9.2 million
These reserves were in close agreement to the reserves as determined in a
1993 technical study of the Delvina Field by a major U.S. based integrated oil
and gas company.
Poco Oil Co. recommended the Company pursue the project as it represented
a favorable and low risk petroleum development investment opportunity. They
recommended a two-phased experimental program followed by a development
program. The initial phase of the experimental program budgeted at US$3.25
million consists of side tracking two wells to a better structural location
and then fracing these wells if necessary. Upon completion of the
experimental phase, a decision to enter the second subphase or go directly to
the development phase will be taken. The projected budget for experimental
and production costs is US$30 million over a five year period. Approximately
one-half of this requirement is expected to be available from ongoing cash
flow from the Delvina project.
In anticipation of the Joint Operating Agreement being executed this
summer, the Company is in the process of reviewing various financing options.
In addition to its fiscal requirements, the Delvina project will require the
expertise of an experienced management team. Towards this end, the Company is
in discussion with industry partners to satisfy this requirement.
As stated in the March 4th, 1998 press release, the terms and conditions
of the Joint Operating Agreement between the Company and SH.A. Albpetrol will
define the fiscal regime under which operations at Delvina will be conducted.
Upon execution of the Joint Operating Agreement, the Company has agreed to
issue to Anglo Adriatic Group a finders fee in the form of 1.5 million common
shares of the Company. The issuance of these shares is subject to regulatory
approval.
BY ORDER OF THE BOARD
Grande Portage Resources Ltd.
By: ''A.T. Griffis''
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A.T. Griffis |
